Planning 2.0: Coplanning


My first financial plan came when I was in my early 30s. I was single and just starting to make some money. I had a little debt but owned my first condominium and really wanted to find a way to save more. My advisor, a CFP who is no longer in the business, produced a full leather-bound binder. The plan was beautifully prepared with all sorts of charts and graphs. It also had language that discussed my retirement, risk management needs (insurance) and even dipped into my estate. I don’t remember what it cost, but I remember it not being too much because I had money to start with his investment recommendations. As I reflect back, I think more about what it wasn’t instead of what it was.

  • It wasn’t flexible. It was printed on paper (killed a bunch of trees), which meant that he would have to reprint any changes, updates or additions he made (killing a completely new set of trees).
  • It wasn’t intuitive. I was in my early 30s, not married with limited assets. For example, did we really need to spend that much time and energy on my estate plan?
  • It wasn’t personal. Most of the charts, graphs and recommendations seemed impersonal. The plan seemed cookie cutter and followed the comprehensive planning process recommended by the advisor’s firm and CFP organizations.
  • We never discussed it again.  There were no update meetings, no reviews on the plan – only performance statements.

Not knowing any better and not seeing other options, I followed the plan, invested my meager savings and went forward. However, the experience never seemed that great. I think it was fortunate that I lost touch with the advisor when I moved.

Whose plan is it anyway?

That planning experience and the two attempts that followed (after marriage and then after kids) were similar in that they felt overwhelming when it came to data gathering and budgeting, and underwhelming when it came to the actual recommendations from the advisor. What I realized recently, as Raef Lee and I have been working on our new paper, is that there is a good reason why it never felt right. The plan wasn’t mine—it was the advisor’s.

When I think about that first plan, I knew that I couldn’t make changes (without a lot of effort) or say I didn’t want to spend time on some areas. It was his comprehensive process and he used it as a way to make recommendations on how to invest in front-end loaded, proprietary funds that his company offered (and yes, I bought them).

Planning 2.0: Coplanning Click To Tweet

What about today?

More recently, my wife and I decided that a second set of eyeballs on our goals made sense so we thought we would try it again. I had been a do-it-yourself investor for some time, and while I think I have done a good job with financial planning for us too, I think it made sense to hire a professional. For the first time, the process spoke to me. The data gathering was easier due to personal financial management software that we used to store most of our “stuff.” The cash flow and budgeting analysis was easy, as we downloaded what we spend from Quicken. Even the final planning meeting was easy because we met at our house over pizza and wine (highly recommend). Most important, the plan was on the computer instead of on paper. Our advisor had taken us through a goals-based planning scenario so we were able to modify (in real time) some assumptions as we were discussing the plan.

This is now our plan—not the advisors. We own the plan, the revisions and the assumptions. The advisor allowed us to coplan, and that’s the future of financial planning today.

From advisor-centric to client-centric

This week Raef Lee and I are pleased to announce the publication of our newest paper, written with Spenser Segal of ActiFi, called the Next Wave of Advice Management. The paper (the second in the “Next Wave” series) looks at the evolution of planning as a way to gather assets to becoming the value hub of an advisors business. At the same time, the paper asks, “How do you create that customized client-facing planning while mechanizing your office to avoid the “drop-the-ball syndrome” that many service businesses have?” (Like my Bike Shop example.)

By creating two fictional client personas, we look at how the planning process is changing to meet the consumer’s preferences whether or not they’re looking for holistic, segmented, modular or even project-based planning. We also show what cash flow or goals-based planning software is out there to meet the demands and needs of those clients. We also discuss micro-moments that can help reinforce the planning process during the client journey. Lastly, we walk through the results of 46 individual firms that have automated their planning processes while customizing the delivery to the client.

Download the paper today

There is a way to create and automate the planning process so that it will meet the client where they need to be met. One that creates real value for the client, yet it’s automated for efficiency in your office. The Next Wave of Advice Management: Use Client-centric Planning to Create a Personalized Experience is available today.

What does your planning process look like today? Who owns the plan: you or your clients?

Spenser Segal and ActiFi are not affiliated with SEI or its subsidiaries.

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John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

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